A BILL to amend the Code of West Virginia, 1931, as amended, by
adding thereto a new section, designated §18-7B-7a; and to
amend said code by adding thereto a new article, designated
§18-7C-1, §18-7C-2, §18-7C-3, §18-7C-4, §18-7C-5, §18-7C-6,
§18-7C-7, §18-7C-8, §18-7C-9, §18-7C-10, §18-7C-11, §18-7C-12,
§18-7C-13 and §18-7C-14, all relating to the merger and
consolidation of the Teachers Defined Contribution Retirement
System and the State Teachers Retirement System generally;
closing the Teachers Defined Contribution Retirement System to
newly hired personnel; placing rehires in last plan to which
rehire contributed; setting forth short title; setting forth
legislative findings and purpose; providing definitions;
providing for merger and consolidation of the Teachers Defined
Contribution Retirement System and the State Teachers Retirement System; setting forth dates and time periods;
providing for notice to members; providing for education of
members; specifying dates and relevant time periods; providing
for conversion and transfer of assets from the Teachers
Defined Contribution Retirement System to the State Teachers
Retirement System; providing for election on the question of
merger and consolidation of the Teachers Defined Contribution
Retirement System and the State Teachers Retirement System;
prior service in State Teachers Retirement System unaffected;
setting forth terms of election and defining valid election;
setting forth terms of merger and consolidation of the
Teachers Defined Contribution Retirement System and the State
Teachers Retirement System; requiring members of defined
contribution plan pay additional amount in order to receive
full actuarial credit upon merger; establishing time period
for payment and interest; plan loans; loan terms; addressing
withdrawals and cash-outs; providing for service credit in the
State Teachers Retirement System; providing that provisions of
article are void if less than a majority of at least one half
of the members of the defined contribution plan vote in favor
of the merger; allowing Consolidated Public Retirement Board
to contract directly for professional services; providing the
election is deemed final; addressing qualified domestic
relations orders; providing for vesting; setting forth minimum guarantees; providing for due process and right to appeal; and
providing for nonseverability.

Be it enacted by the Legislature of West Virginia:
That the Code of West Virginia, 1931, as amended, be amended
by adding thereto a new section, designated §18-7B-7a; and that
said code be amended by adding thereto a new article, designated
§18-7C-1, §18-7C-2, §18-7C-3, §18-7C-4, §18-7C-5, §18-7C-6,
§18-7C-7, §18-7C-8, §18-7C-9, §18-7C-10, §18-7C-11, §18-7C-12,
§18-7C-13 and §18-7C-14, all to read as follows:ARTICLE 7B. TEACHERS DEFINED CONTRIBUTION RETIREMENT SYSTEM.

§18-7B-7a. Plan closed to persons employed for the first time
after June, 2005; former employees.

The retirement system created and established in this article
shall be closed and no new members accepted therein after the
thirtieth day of June, two thousand five.Notwithstanding the
provisions of sections seven and eight of this article, all persons
who are regularly employed for full-time service as a member or
employee whose initial employment commences after the thirtieth day
of June, two thousand five, shall become members of the State
Teachers Retirement System created and established in article
seven-a of this chapter: Provided, That any person rehired after
the thirtieth day of June, two thousand five, shall become a member
of the Teachers Defined Contribution Retirement System created and
established in this article, or the Teachers Retirement System created and established in article seven-a of this chapter,
depending upon the system to which he or she last contributed
while employed with an employer mandating membership and
contributions to one of those plans: Provided, however, That if,
and only if, the Teachers Defined Contribution Retirement System is
merged with the Teachers Retirement System pursuant to the
provisions of article seven-c of this chapter, then all employees
shall become a member of the Teachers Retirement System as of the
first day of July, two thousand six, as provided in article seven-c
of this chapter.

§18-7C-1. Short title.
This article may be cited as the "Teachers' Retirement Equity
Act."§18-7C-2. Legislative findings and purpose.
(a) The Legislature declares that the State of West Virginia
and its citizens have always believed in a strong public education
system, with the state's own constitution mandating a thorough and
efficient public education system. The Legislature notes that the
quality of the state's education system is dependent, inter alia,
upon the motivation and quality of its teachers and educational
service personnel.
(b) The Legislature finds and declares that the State of West Virginia is privileged to be the home of some of the best teachers
and service personnel in this nation and that state teachers and
service personnel are dedicated and hard-working individuals. The
Legislature further finds and declares that West Virginia teachers
and service personnel should have a retirement program whereby they
know in advance what their retirement benefit will be. A defined
benefit retirement program will prevent teachers and service
personnel from having to bear the risk of investment performance to
receive their full retirement benefit. The Legislature notes that
uncertainty exists in the investment markets, especially in the
post-September eleventh era, and that placing this risk and
uncertainty upon the State in the form of a defined benefit plan
will protect and ensure a retirement benefit for West Virginia
teachers and educational service personnel.
(c) The Legislature declares that it is in the best interests
of the teachers and public education in this state and conducive to
the fiscal solvency of the Teachers Retirement System that the
Teachers Defined Contribution Retirement System be merged with the
State Teachers Retirement System.
(d) The Legislature also finds that a fiscally sound
retirement program with an ascertainable benefit aids in the
retention and recruitment of teachers and school service personnel
and that the provisions of this article are designed to accomplish
the goals set forth in this section.
(e) The Legislature has studied this matter diligently and in
making the determination to merge the two plans has availed itself
of an actuarial study of the proposed merger by the actuary of the
Consolidated Public Retirement Board as well as engaging the
service of two independent actuaries.§18-7C-3. Definitions.
As used in this article, unless the context clearly requires
a different meaning:
(1) "Defined contribution system" means the Teachers Defined
Contribution Retirement System created and established in article
seven-b of this chapter.
(2) "Existing retirement system" or "State Teachers Retirement
System" means the State Teachers Retirement System created and
established in article seven-a of this chapter.
(3) "Board" means the Consolidated Public Retirement Board
created and established in article ten-d, chapter five of this code
and its employees.
(4) "Member" means and includes any person who has at least
one dollar in the defined contribution system.
(5) "Assets" or "all assets" means all member contributions,
employer contributions and interest or asset appreciation in a
member's defined contribution account, less any applicable fees as
approved by the Board.
(6) "Salary" or "annual salary" means the annual contract salary for those persons working in accordance with an employment
contract and in any other event as an annualized amount determined
by multiplying a persons hourly rate of pay by two thousand eighty
hours.
(7) "Date of merger" means, in the event of a positive vote on
the merger, the first day of July, two thousand six.§18-7C-4. Merger.
(a) On the first day of July, two thousand six, the Teachers
Defined Contribution Retirement System created and established in
this article shall be merged and consolidated with the Teachers
Retirement System created and established in article seven-a of
this chapter, pursuant to the provisions of this article:
Provided, That if the majority of the voting members of the
Teachers Defined Contribution Retirement System do not elect in
favor of the merger, then the provisions of this article are void
and of no force and effect and the defined contribution system
created and established in article seven-b of this chapter shall
continue as the retirement system for all members in that system as
of the thirtieth day of June, two thousand six, and for those
persons rehired who were paying into the defined contribution
system at the time of his or her last employment.
(b) If the merger provided in this article occurs and, should
any additional unfunded actuarial accrued liability in the Teachers
Retirement System (calculated in an actuarially sound manner) occur during any fiscal year due to changes in actuarial assumptions,
changes in investment performance or increases in benefits or
additional benefits occurring by operation of law in effect on the
effective date of this article, and the additional unfunded
actuarial accrued liability persists for a period of seven
consecutive fiscal years, the Governor shall submit to the
Legislature a plan to fund the additional unfunded actuarial
accrued liability over a reasonable period.§18-7C-5. Notice, education, record-keeping requirements.
(a) Commencing not later than the first day of August, two
thousand five, the Board shall suspend all seminar and outreach
educational efforts with respect to the Teachers Defined
Contribution Retirement System and, not earlier than the first day
of September, two thousand five, shall begin an educational program
with respect to the merger of the defined contribution plan with
the State Teachers Retirement System. This education program shall
address, at a minimum, the law providing for the merger, the
mechanics of the merger, the election process, relevant dates and
time periods, the benefits, potential advantages and potential
disadvantages if members elect to remain in the defined
contribution system, the benefits, potential advantages and
potential disadvantages of becoming members of the Teachers
Retirement System, potential state and federal tax implications in
general attendant to the various options available to the members and any other pertinent information deemed relevant by the Board.
The Board shall provide this information through its website, by
written materials, electronic materials or both written and
electronic materials delivered to each member and by classes or
seminars if, in the best judgment of the Board, the classes and
seminars are necessary. The Board shall also provide this
information through computer programs or, at the discretion of the
Board, through a program of individual counseling which is optional
on the part of the member and through any other educational program
or programs deemed necessary by the Board.
(b) The Board shall provide each member with a copy of the
written or electronic educational materials and with a copy of the
notice of the election. The notice shall provide full and
appropriate disclosure of the merger and the election process,
including the date of the election. The Board shall also cause
notice of the election to be published in at least ten newspapers
of general circulation in this state. This notice shall be by
Class III legal advertisement published in accordance with the
provisions of article three, chapter fifty-nine of this code. The
Board shall cause this notice to be published not later than thirty
days prior to the beginning of the election period and not sooner
than sixty days prior to the beginning of the election period.
(c) It is the responsibility of each member of the defined
contribution plan to keep the Board informed of his or her current address. If a member does not keep the Board informed of his or
her current address, the member is deemed to have waived the right
to receive any information from the Board.
(d) Once the Board has complied with the provisions of this
section, every member of the defined contribution plan is deemed to
have actual notice of the election and all matters pertinent
thereto.

§18-7C-6. Conversion of assets from defined contribution system to
State Teachers Retirement System.

(a) If a majority of members voting elect to merge the defined
contribution system into the State Teachers Retirement System, the
conversion and merger shall be governed by the provisions of this
article. The Teachers Defined Contribution Retirement System shall
not exist after the thirtieth day of June, two thousand six, and
all members thereof shall become members of the State Teachers
Retirement System as provided herein.
(b) Following the election in favor of the merger, the Board
shall transfer all assets in the defined contribution plan account
into the State Teachers Retirement System and members shall have
the option to pay into the State Teachers Retirement System one and
one half of one percent of the member's salary as of the thirtieth
day of June, two thousand five, multiplied by the number of years
the member transferred from the defined contribution plan into the
State Teachers Retirement System. Members shall have until the first day of July, two thousand seven, to pay this amount. If a
member makes no payment whatsoever of this amount by the first day
of July, two thousand seven, the member is deemed to have forever
waived his or her right to pay this amount and to have elected to
not pay this amount. In this instance the Board shall make the
appropriate actuarial adjustment to that member's annuity.
(c) The Board shall make available to the members a loan in
accordance with the provisions of section thirty-four, article
seven-a of this chapter to be used by the members to pay all or a
part of the one and one-half percent amount established in this
section. Notwithstanding any provision of this code, any rule or
any policy of the Board to the contrary, the interest rate on any
loan used to pay the one and one-half percent amount may not exceed
seven and one-half percent and the amount borrowed may not exceed
twelve thousand dollars. In the event a plan loan is used to pay
the one and one-half percent, the Board shall make any actuarial
adjustments at the time the loan is made. The Board shall make
this plan loan available for members until the thirtieth day of
June, two thousand seven.
(d) The Board shall include a payroll deduction program for
the repayment of the plan loan established in this section.
(e) If the merger and consolidation is elected by a majority
of those persons voting, as of the first day of July, two thousand
six, the members' contribution rate shall become six percent of salary or wages and the retirement members who make a contribution
into the State Teachers Retirement System on or after the first day
of July, two thousand six, shall be governed by the provisions of
article seven-a of this chapter subject to the provisions of this
article.
(f) In the event a member has withdrawn or cashed out part of
his or her defined contribution plan, that member will not be given
credit for those moneys cashed out or withdrawn. The Board shall
make an actuarial determination as to the amount of credit a member
loses on the amounts he or she has withdrawn or cashed out which
actuarial adjustment shall be expressed as a loss of service
credit: Provided, That a member may repay those amounts he or she
cashed out or withdrew, along with interest determined by the
Board, and receive the same credit as if the withdrawal or cash out
never occurred, if this repayment is completed within five years
following the date of the cash out: Provided, however, That these
amounts shall be fully repaid no later than the thirtieth day of
June, two thousand six. If the repayment is five or more years
following the cash out, then he or she must repay any forfeited
employer contribution account balance along with interest
determined by the Board in addition to the cash out amount:
Providedfurther, That these amounts shall be fully repaid not
later than the thirtieth day of June, two thousand six.
(g) Where the member has cashed out of his or her teacher defined contribution plan account balance after the last day of
June, two thousand-one, and that member wishes to repurchase
defined contribution plan service after the thirtieth day of June,
two thousand six, then the member must repay the teachers
retirement plan within five years of the date of cash out.
(h) Any prior service in the State Teachers Retirement System
a member may have is not affected by the provisions of this
article.

§18-7C-7. Service credit in State Teachers Retirement System
following merger.

Any member transferring all of his or her assets from the
defined contribution system to the State Teachers Retirement System
pursuant to the provisions of this article and who has not made any
withdrawals from his or her defined contribution plan is entitled
to service credit in the State Teachers Retirement System for each
year, or part thereof, as governed by the provisions of article
seven-a of this chapter, the member worked and contributed to the
defined contribution plan. Any member who has made withdrawals or
cash outs will receive service credit based upon the amounts
transferred and the Board shall make the appropriate actuarial
determination of the service credit the member will receive.§18-7C-8. Election; Board may contract for professional services.
(a) The Board shall arrange for and hold an election for the
members of the defined contribution plan on the issue of merging the defined contribution plan into the state teachers retirement
plan with the result being that, if sixty percent or more of the
members casting ballots vote in the positive on the issue, that all
members of the defined contribution plan will transfer, or have
transferred, all assets held by them or on their behalf in the
defined contribution plan to and become members of, and entitled to
the benefits of the State Teachers Retirement System and be
governed by the provisions of the State Teachers Retirement System
subject to the provisions of this article: Provided, That at least
one half of the members of the defined contribution plan must vote
on the question in order for the election to be valid and binding.
(b) Any person who has one dollar or more in a defined
contribution account created and established pursuant to article
seven-b of this chapter is allowed to vote on the question of the
merger.
(c) The Board may retain professional services it deems
necessary to: (1) Assist in the preparation of educational
materials for members of the defined contribution plan to inform
these members of their options in the election; (2) assist in the
educational process of the members; (3) assist in the election
process and the election; and (4) ensure compliance with all
relevant state and federal laws.
(d) Due to the time constraints inherent in the merger process
set forth in this article in specific, and to the nature of the professional services required by the Consolidated Public
Retirement Board in general, the provisions of article three,
chapter five-a of this code relating to the Division of Purchases
of the Department of Finance and Administration do not apply to any
contracts for any actuarial services, investment services, legal
services or other professional services authorized under the
provisions of this article.
(e) The election provided in this section may be held through
certified mail or in any other way the Board determines is in the
best interest of the members. Each ballot shall contain the
following language, in bold fifteen-point type: "By casting this
ballot I am making an educated, informed and voluntary choice as to
my retirement and the retirement system of which I wish to be a
member. I am also certifying that I have read and understand the
consequences of my vote in this election." Each ballot shall be
signed by the member voting. The Board shall retain the ballots in
a permanent file.
(f) The election shall be held not later than the first day of
March, two thousand six, and the Board shall ascertain the results
of the election not later than the last day of March, two thousand
six. The Board shall certify the results of the election to the
Governor, to the Legislature and to the members not later than the
fifth day of April, two thousand six.
(g) The election period shall terminate and no votes may be cast or counted after the twelfth day of March, two thousand six,
and if the election is conducted through the United States mail,
the ballot shall be postmarked not later than the twelfth day of
March, two thousand six, in order to be counted.
(h) The Board shall take all necessary steps to see that the
merger does not affect the qualified status with the Internal
Revenue Service of either retirement plan.§18-7C-9. Election deemed final.
(a) The election is deemed final and each member, whether he
or she votes or fails to vote, shall thereafter be bound by the
results of the election. Every member is deemed to have made an
informed, educated, knowing and voluntary decision and choice with
respect to the election. Those members who fail or refuse to vote
are also deemed to have made an informed, educated, knowing and
voluntary decision and choice with respect to the election and with
respect to voting and shall be bound by the results of the election
as if he or she voted in the same.
(b) Only one election may be held pursuant to the provisions
of this article on the issue of merging the defined contribution
plan with the state teachers retirement plan.§18-7C-10. Qualified domestic relations orders.
Any member having a qualified domestic relations order against
his or her defined contribution account is allowed to repurchase
service in the State Teachers Retirement System by repaying any monies distributed to the alternate payee along with the interest
as set by the Board: Provided, That a member shall repay any
amounts under this section by the last day of June, two thousand
twelve. The provisions of this section are void and of no effect
if the members of the defined contribution plan fail to elect to
merge the defined contribution plan with the State Teachers
Retirement System.§18-7C-11. Vesting.
Any member who works one hour or more after the merger
provided for in this article occurs is subject to the vesting
schedule set forth in article seven-a of this chapter: Provided,
That if a member is vested under the defined contribution plan and
his or her last contribution was not made to the State Teachers
Retirement System, that member is subject to the vesting schedule
set forth in article seven-b of this chapter.§18-7C-12. Minimum guarantees.
(a) Any member of the defined contribution plan, who has made
a contribution to the State Teachers Retirement System after the
merger, is guaranteed a minimum benefit equal to his or her
contributions to the defined contribution plan as of the thirtieth
day of June, two thousand six, plus his or her vested employer
account balance as of that date, as stated by the Board or the
Boards professional contractor.
(b) A member of the defined contribution plan who has made contributions to the State Teachers Retirement System after the
thirtieth day of June, two thousand six, where that plan has been
merged into the State Teachers Retirement System pursuant to the
provisions of this article, shall have, upon eligibility to receive
a distribution under article seven-a of this chapter, at a minimum,
the following three options: (1) The right to receive an annuity
from the State Teachers Retirement System created and established
in article seven-a of this chapter based upon the benefit and
vesting provisions of that article; (2) the right to withdraw from
the State Teachers Retirement System and receive his or her member
accumulated contributions plus regular interest thereon as set
forth in article seven-a of this chapter; or (3) the right to
withdraw and receive his or her original vested defined
contribution account balance as of the date of the merger as
determined by the Board or its professional third-party benefits
administrator pursuant to the vesting provisions of section twelve
of this article.
(c) Any member of the Teachers Defined Contribution Retirement
System who makes no contribution to the State Teachers Retirement
System following approval of the merger and following the actual
merger is guaranteed the receipt of the amount in his or her total
vested account in the defined contribution plan on the date of the
merger plus interest thereon at four percent accruing from the date
of the merger.§18-7C-13. Due process and right to appeal.
Any person aggrieved by any actuarial determination made by
the Board following the election, if the result of the election is
in favor of merger and consolidation, may petition the Board and
receive an administrative hearing on the matter in dispute. The
administrative decision may be appealed to a circuit court.
§18-7C-14. Nonseverability.
If any section, subsection, subdivision, subparagraph,
sentence or clause of this article is adjudged to be
unconstitutional or invalid, the adjudication shall cause the
entire article to be void and, to this end, the provisions of this
article are nonseverable.

NOTE: The purpose of this bill is to provide for the merger
and consolidation of the Teachers Defined Contribution Retirement
System and the State Teachers Retirement System; Among its
provisions in achieving the merger, are the following: (1) Closing
the Teachers Defined Contribution Retirement System to newly hired
personnel; (2) requiring rehires to be in last plan contributed to;
(3) setting forth a short title; (4) setting forth legislative
findings and purpose; (5) providing definitions; (6)providing for
merger and consolidation of the Teachers Defined Contribution
Retirement System and the State Teachers Retirement System;
(7)setting forth dates and time periods; (8) providing for notice
to members; (9)providing for education of members; (10) specifying
dates and relevant time periods; (11)providing for conversion and
transfer of assets from the Teachers Defined Contribution
Retirement System to the State Teachers Retirement System; (12)
providing for election on the question of merger and consolidation
of the Teachers Defined Contribution Retirement System and the
State Teachers Retirement System; (13) providing that prior service
in State Teachers Retirement System is unaffected; (14) setting
forth terms of election and defining valid election; (15)setting
forth terms of merger and consolidation of the Teachers Defined Contribution Retirement System and the State Teachers Retirement
System; (16) requiring members of defined contribution plan to pay
additional amount in order to receive full actuarial credit upon
merger; (17) establishing time period for payment and interest;
(18) plan loans; loan terms; (19) addressing withdrawals and cash
outs; (20) providing for service credit in the state Teachers
Retirement System; (21) providing that provisions of article are
void if less than a majority of at least one half of the members of
the defined contribution plan vote in favor of the merger; (22)
allowing Consolidated Public Retirement Board to contract directly
for professional services; (23) providing the election is deemed
final; (24) addressing qualified domestic relations orders; (25)
providing for vesting; (26)setting forth minimum guarantees; (27)
providing for due process and right to appeal; and (28) providing
for nonseverability.

§18-7B-7a and article 7C are new; therefore, strike-throughs
and underscoring have been omitted.